Europe Concerns Weigh on Asian Shares

Asian markets were mixed Tuesday as investors continued to fret over the situation in Europe, though strong earnings in Hong Kong helped the Hang Seng close higher.

Cyprus remained the focus for markets in Asia after Eurogroup head Jeroen Dijsselbloem on Monday said that the structure of the island's rescue package could serve as a template for future bailouts in region, according to media reports.

Although Mr. Dijsselbloem subsequently backed away from the comments, they had already put an end to the relief rally that followed Monday's bailout agreement.

Investors fear that the plan to impose losses on bondholders and some depositors could be repeated in other countries, dispelling the notion that the approach in Cyprus was a one-off solution, and raising concerns over a loss of confidence in deposits held by banks in Europe's peripheral countries.

"The market is not convinced that what we have seen in Cyprus will not have long-term effects on the euro zone," said Tim Waterer, senior trader at CMC Markets in Sydney.

After falling 1.0% against the U.S. dollar overnight, the euro stabilized during Asian trade, at $1.2865 late in the session.

The market most affected by the continued European jitters was Australia, where the S&P/ASX 200 fell 0.8% to 4950.20, with mining stocks leading broad-based declines: Rio Tinto dropped 2.3% and BHP BillitonBBL0.74% was 1.4% lower.

The Nikkei Stock Average was also lower, ending 0.6% down at 12471.62 There was some support from index heavyweight Softbank, which gained 2.5% after the firm announced that it would make a tender offer in April to increase its stake in GungHo Online Entertainment. Another big stock on the index however, Fast Retailing,FRCOY-1.04% lost 1.8%.

Also in Japan, Sharp fell 1.7% as investors continue to await a decision from Hon Hai Precision Industry as to whether or not the company will inject capital into the struggling LCD panel maker.

In China, the Shanghai Composite Index dropped 1.3% to 2297.67 as news emerged that the Guangdong provincial government became the first local government to release detailed property-control measures.

Hong Kong stocks bucked the market trend as earnings from a number of high profile companies offset the gloom from Europe. The Hang Seng Index ended up 0.3% at 22311.08.

Also in Hong Kong, developer Henderson Land jumped 5.5% after the company announced that its net profit rose 28% on-year in 2012.

Conglomerate Wharf (Holdings) added 2.4% after its core profit rose by 37% on year in 2012, helped by its Hong Kong retail property, mainland property development and investment businesses.

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